Economic Beat

Volcker: Fed Is Too Big for Its Britches

In a recent critique of the Federal Reserve under Ben Bernanke, former Fed chairman Paul Volcker cited two approaches that a central bank should studiously avoid when implementing policy.

"Abstract economic modeling and the endless regressions of econometricians will be of little help," Volcker declared in a speech on May 29 at the Economic Club of New York. "The new approach of 'behavioral' economics itself is recognition of the limitations of mathematical approaches, but that new 'science' is in its...